Obama calls for $9 federal minimum wage pegged to cost of living

Protesters, many of them employees at Wendy's fast-food restaurant, demonstrate outside of one of the restaurants to demand higher pay and the right to form...

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In his 2013 State of the Union address, President Barack Obama called for an increase in the federal minimum wage from $7.25 to $9.00 an hour. But he also went a step further, arguing that the minimum wage should automatically rise with the cost of living.

“Tonight, let’s declare that in the wealthiest nation on Earth, no one who works full-time should have to live in poverty,” he said.

First enacted in 1938, the federal minimum wage has traditionally not been tied to any particular index—as a result, it has only been increased through sporadic acts of Congress. The minimum wage reached its peak value in 1968, when it was raised to $1.60 an hour, or $10.58 in 2012 dollars. Among the states, only Washington has a current minimum wage set above $9. Washington’s current minimum wage is set at $9.19, and chained to the Consumer Price Index.

Restaurant Opportunities Center United co-director Saru Jayaraman welcomed the president’s call for a higher minimum wage, but urged him not to leave tipped workers out of the initiative.

“The president must also call on Congress to ensure that this Congress’ minimum wage increase bill includes an increase for tipped workers—which has been frozen at $2.13 an hour since 1991,” said Jayaraman in a statement. “Then, and only then, can we ensure that all workers earn a fair day’s pay for a hard day’s work.”

Currently, a minimum wage employee who works 40 hours for every week of the year will earn $15,080 annually—just $50 below the 2012 federal poverty line for a family of two.